Form 8928 (Excise Taxes)

• Plan identification: The plan's formal name, plan year start and end dates, and the three-digit plan number assigned by the employer or plan administrator (same as used on any Form 5500 filing for the plan).
• Plan sponsor EIN: The nine-digit employer identification number for the plan sponsor.
• Description of each failure: Which code section applies (Section 4980B, 4980D, or 4980G), what the failure was, the date it first occurred, the date it was first discovered, and the date it was corrected (or confirmation it is still ongoing).
• Number of affected individuals: For Section 4980B, the count of qualified beneficiaries affected by each qualifying event. For Section 4980D, the count of individuals to whom the failure relates for each failure.
• Days of noncompliance: For Section 4980B and 4980D, the number of calendar days from when the failure first occurred through when it was corrected (or the applicable end-of-noncompliance-period date under the statute). For multiple qualifying events or multiple failures, you need a separate count for each.
• Prior-year group health plan costs: The aggregate amount the employer paid or incurred for its group health plans during the preceding tax year. Required to calculate the 10% overall cap for unintentional Section 4980B and 4980D failures.
• Total employer HSA contributions for the year (Section 4980G): The aggregate amount contributed to all employees' HSAs during the calendar year, broken out by employee and coverage tier (self-only vs. family). See the HSA page.
• Date-of-knowledge documentation: Records showing when anyone liable for the tax first knew, or reasonably should have known, that the failure existed. This date triggers the 30-day window for the reasonable-cause zero-tax rule; it is the most important date in the analysis.
• Correction documentation: Evidence that the failure was retroactively remedied and that the affected individual was restored to the financial position they would have been in had the failure not occurred.

• Where to file: Mail Form 8928 to: Department of the Treasury, Internal Revenue Service Center, Kansas City, MO 64999. If using a private delivery service (FedEx, UPS, or DHL), use the IRS street address for Kansas City; private delivery services cannot deliver to a P.O. box.
• Electronic filing: Form 8928 is not available for electronic filing. It must be paper-filed.
• Payment, EFTPS (recommended): Pay through the Electronic Federal Tax Payment System at eftps.gov. EFTPS is free, provides immediate confirmation, and creates an auditable payment record. If you are not already enrolled, allow several days for setup.
• Payment, same-day wire: Contact your financial institution to arrange a same-day wire. Ask for the IRS instructions for federal tax payments via same-day wire.
• Payment, check: Make payable to "United States Treasury." Write the plan sponsor's name, address, EIN, and "Form 8928" on the memo line to ensure the payment is posted to the correct account.
• Extension: File Form 7004 by the original due date to extend the time to file Form 8928. The extension does not extend the time to pay; any tax owed is still due by the original deadline. Interest accrues on unpaid balances from the original due date even with a valid extension on file.
• Amended returns: To correct a previously filed Form 8928, whether to claim a refund of overpaid taxes, receive a credit, or report additional taxes due in the same year, file an amended Form 8928 with "Amended Return" written at the top. Attach a detailed explanation of why the claim is being made.

• Copy of the filed Form 8928With all worksheets and attachments.
• Proof of paymentEFTPS confirmation number, wire transfer confirmation, or cancelled check.
• Documentation of the underlying failureWhat went wrong, which individuals were affected, and the date the failure first occurred.
• Date-of-knowledge recordsEvidence showing the specific date anyone liable for the tax first knew, or should have known through reasonable diligence, that the failure existed. This is the clock-start for the 30-day reasonable-cause correction window.
• Correction recordsWritten documentation that the failure was retroactively remedied and that each affected individual was restored to the financial position they would have been in had the failure not occurred.
• Prior-year group health plan cost documentationUsed to calculate the 10% overall cap (for Section 4980B and 4980D unintentional failures).
• For Section 4980GRecords of employer HSA contributions by employee and coverage tier (self-only vs. family) for the full calendar year, and documentation of the comparability analysis performed.
• IRS examination materialsAny IRS examination notices, correspondence, or determination letters related to the failure.
• Retention periodFollow your federal tax return retention schedule, generally at least six years after filing, which covers the standard six-year statute of limitations for tax assessments.

Common traps

FAQs

What is the 30-day reasonable-cause correction window, exactly?

If a failure was due to reasonable cause and not willful neglect, and you fully correct it within 30 days of the first date anyone liable for the tax knew, or reasonably should have known, that the failure existed, no excise tax is owed. "Corrected" means the failure is retroactively undone to the extent possible and the affected individual is restored to the financial position they would have been in had the failure never occurred. The 30-day window is tight; once it passes, the tax accrues for every prior day of noncompliance even if you then correct immediately. Document both the date of knowledge and the correction date.

Does the Section 4980D small employer exception protect fully insured employers with under 50 employees?

Partly. If you employ an average of 2-50 employees and provide coverage solely through a contract with a health insurance issuer, you are not liable for Section 4980D excise tax on any failure that is solely due to the coverage offered by the insurer. However, this exception does not apply to mental health parity violations under Section 9811; those remain the employer's liability regardless of size. It also does not apply if the failure is partly the employer's own doing rather than the insurer's.

Does the Section 4980B small employer exception protect employers with fewer than 20 employees?

Yes. COBRA (and the Section 4980B excise tax) does not apply to plans maintained by employers that normally employed fewer than 20 employees on a typical business day during the preceding calendar year. Important: for controlled groups under IRC Section 414, all entities under common control are counted together, not separately.

We had an ACA market reform violation. Is Form 8928 the only consequence?

No, but the picture is more nuanced than a parallel DOL penalty running alongside the IRS tax. The IRS Section 4980D excise tax is the primary automatic financial penalty. The DOL's Employee Benefits Security Administration (EBSA) has separate enforcement authority over ERISA Section 715 (which incorporates the ACA market reforms), but EBSA's tools are different: it investigates, seeks voluntary correction, and can pursue lawsuits for equitable relief. DOL does not have an automatic per-day civil penalty for general ACA market reform failures; only the IRS side produces the $100/day/individual amount. The one area where DOL does carry its own automatic financial penalty is failure to timely provide a compliant Summary of Benefits and Coverage (SBC); that carries a separate DOL civil penalty of up to $1,443 per failure (2026 amount, unchanged from 2025; adjusts annually for inflation). In short, a Section 4980D violation can trigger concurrent IRS and DOL scrutiny, but only the IRS side generates an automatic per-day dollar amount. Consulting a benefits attorney when a market reform violation is discovered is strongly recommended.

Our HSA contributions weren't exactly equal for all employees. Does 35% of everything owed apply?

The 35% rate applies to your aggregate HSA contributions for the year, not just the shortfall. So if you contributed $1,000,000 to employee HSAs across your workforce but failed comparability for even one coverage period with one group of employees, the potential Section 4980G tax is $350,000 on the full $1,000,000. That is why HSA comparability analysis before year-end, and correction while still within the same calendar year, is critical. A reasonable-cause waiver is available if the failure was not intentional. See the HSA page.

• IRS: About Form 8928
• IRS: Instructions for Form 8928 (Rev. December 2025)
• IRS: Form 7004 (Application for Automatic Extension of Time to File)
• IRC Section 4980B: Excise Tax on COBRA Failures (LII/Cornell)
• IRC Section 4980D: Excise Tax on Group Health Plan Market Reform Failures (LII/Cornell)
• IRC Section 4980G: Excise Tax on Non-Comparable HSA Contributions (LII/Cornell)
• EFTPS: Electronic Federal Tax Payment System

• Governmental plans (Section 4980B): Governmental plans under IRC Section 414(d) are fully exempt from Section 4980B. COBRA continuation coverage is not required, and no Section 4980B excise tax applies. Note: governmental plans are not exempt from Section 4980D (HIPAA/ACA market reforms), so ACA group health plan requirements still apply.
• Church plans (Section 4980B): Church plans under IRC Section 414(e) are also fully exempt from Section 4980B. Like governmental plans, church plans have no COBRA obligation and no Section 4980B excise tax exposure.
• Church plans (Section 4980D): Church plans can still be liable under Section 4980D, but the minimum excise tax of $2,500 or $15,000 per individual does not apply to church plans. Failures are taxed at the straight $100/day/individual rate only, without the minimum floor that applies to other plan types.
• Multiemployer and multiple-employer plans: When the failure is by the plan itself (rather than an individual employer), Form 8928 is due on the last day of the seventh month after the plan year ends, not with the employer's tax return. For calendar-year plans, the due date is July 31. The plan, not individual participating employers, is generally liable for the tax in these cases.
• Third-party administrators, HMOs, and insurers (Section 4980B): These entities can be liable for Section 4980B excise tax if they assumed responsibility for COBRA administration under a legally enforceable written agreement and their act or failure to act caused the violation. Their aggregate annual cap is $2,000,000 across all plans, higher than the standard 10%/$500,000 cap that applies to employers.
• Successor employer liability (M&A): The controlled group rules under IRC Section 414(b), (c), (m), and (o) apply. If an employer acquires a company whose employees were covered under a plan with an unresolved COBRA or market reform compliance failure, the successor may inherit the liability. Pre-acquisition compliance due diligence should always include a review of open COBRA and Section 4980D issues.
• Section 4980E (Archer MSA): Archer MSAs are largely obsolete; no new accounts could be established after December 31, 2007, under the pilot program rules. The vast majority of employers will never encounter Section 4980E liability. If you sponsored a high-deductible health plan and made non-comparable Archer MSA contributions before 2008 that were never corrected, consult a benefits attorney.

★Side-by-side summary of all four excise taxes reported on Form 8928.